News | Business linked to kickback scheme — Baton Rouge, LA

Kos Pharmaceuticals Inc. paid kickbacks to unnamed Louisiana physicians who wrote prescriptions for two of the manufacturer’s cholesterol medications, Advicor and Niaspan, the U.S. Attorney’s Office charged Tuesday in Baton Rouge.

Kos immediately agreed to pay more than $41 million to end its corporate liability for the alleged crime, the Justice Department announced in Washington, D.C.

The charge in Baton Rouge refers to three unnamed Kos executives who allegedly met with two unnamed cardiothoracic surgeons for a dinner in Houma before the surgeons began receiving kickbacks that eventually totaled $323,700.

Those executives and surgeons may remain unnamed in Baton Rouge, First Assistant U.S. Attorney Walt Green said late Tuesday.

“In our district, the investigation is completed,” Green said for the Middle District of Louisiana.

The Justice Department announcement in Washington said the settlement resolved both the criminal case and two civil suits filed by former Kos employees who acted as whistleblowers to expose the kickbacks.

Those whistleblowers will share payments totaling $6.4 million of Kos’ $41 million settlement, Justice Department officials announced.

Another $4.4 million will be paid to Louisiana’s Medicaid program, according to the Justice Department’s written statement. The remaining $30.2 million will go to the federal

 

 

 

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government.

From Lafayette, U.S. Attorney Stephanie A. Finley of the Western District of Louisiana issued a written statement: “Kos Pharmaceuticals made illegal payments to physicians and participated in an unlawful marketing scheme.”

In Baton Rouge, Kos’ charge of “conspiracy to pay kickbacks” alleges the three unnamed Kos executives met with the two Louisiana surgeons in Houma prior to the launch of Advicor in early January 2002.

“Louisiana Executive C and other members of the Kos sales force had known Physician A and Physician B previously, and had called on them in connection with the marketing of other Kos products, including Niaspan,” the charge alleges.

“Following this meeting, Physician A mailed a letter dated January 7, 2002, to Executive A, among others, with a copy to Executive C,” the federal charge alleges.

“In that letter, Physician A proposed that, in exchange for payments totaling approximately $100,000 … Physician A and Physician B would endorse the use of Kos products, including Advicor, for the treatment of cholesterol,” the charge alleges.

The charge, which is not included in any indictment, was filed by the U.S. Attorney’s Office in the form of a bill of information.

That bill of information alleges that Kos paid the two physicians $89,500 as a sponsor of their continuing medical education classes in 2002.

Another $48,000 allegedly was paid that year for the surgeons’ “purported speaking fees.”

In 2003, the charge alleges, Kos paid the two surgeons $77,000 as sponsor of their continuing medical education classes. Another $52,000 allegedly was paid to an unnamed “third-party entity purportedly used by Physician A and Physician B to assist in putting on their classes.”

In December 2004, the charge alleges, “Kos made a payment of approximately $57,200 to another third-party entity purportedly used by Physician A and Physician B to assist in putting on their classes.”

Kos was incorporated in Florida and headquartered in New Jersey during the period of the alleged conspiracy, early 2002 through middle 2006, prosecutors state in their charge in Baton Rouge.

The company now is a subsidiary of industry giant Abbott Laboratories of Abbott Park, Ill.

“These actions occurred prior to Abbott’s acquisition of Kos in 2006 (for $3.7 billion),” Abbott spokeswoman Adell Infante said Tuesday. “And Abbott has not been accused of any wrongdoing.”

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